OBJECTIVES:  To evaluate direct and indirect costs and associated budget impact of insulin degludec (IDeg) compared to insulin glargine U100 (IGlar U100) in the treatment of Type 1 Diabetes Mellitus patients in a basal-bolus regimen (T1DM) in Brazilian Public Healthcare System. METHODS:  A 5-year budget impact model was developed to evaluate direct and indirect costs associated with the treatment of T1DM in Brazil. Annual treatment costs for IDeg and IGlar were calculated based on basal and bolus insulin dosing, needles, hypoglycaemic events, self-monitoring blood glucose tests, routine medical appointments and productivity loss attributed to hypoglycaemia. Clinical inputs were derived mainly from meta-analyses of randomized clinical trials. Unit costs were derived from official pricing and procedures reimbursement lists in the public healthcare perspectives (i.e. CMED, BPS and SIGTAP). To estimate the budget impact, a 1,000 hypothetical cohort population with T1DM is assumed and market-share of insulins derived from market data. Currency rate is 1.00USD-3.36BRL. Univariate deterministic sensitivity analysis was performed to stress robustness of main variables. RESULTS: Annual treatment costs per patient with T1DM were BRL for IDeg and BRL for IGlar U100. In the baseline scenario, the treatment of T1DM with IDeg is associated with BRL of annual cost reductions per patient. Main variables driving this reduction are basal/bolus insulin dose and needles and fewer hypoglycaemic events. Overall budget impact is -101,238BRL and -506,192BRL at Year 1 and 5, respectively. During 5 years, hypoglycaemic events can potentially be avoided. As we used a budget impact approach, HRQoL benefits were not estimated. CONCLUSIONS: The introduction of IDeg in the Brazilian public healthcare system is associated with potential economic savings when compared to IGlar U100 and can positively increase according to the proportion of patients treated with IDeg. Budget-holders can either save resources or treat more patients when managing T1DM.